Minnesota Probate Claims

Minnesota Probate Claim

Minnesota Probate Claims - Minnesota Probate Claim 

Minnesota Probate Claims

Minnesota Probate Claims – Defined

Minnesota Statutes (“M.S.”), Section 524.1-201(6) defines Minnesota Probate Claims in the following manner:

Claims” includes

  • liabilities of the decedent whether arising in contract or otherwise and
  • liabilities of the estate which arise after the death of the decedent including funeral expenses and expenses of administration.

The term does not include

  • taxes,
  • demands or disputes regarding title of a decedent to specific assets alleged to be included in the estate,
  • tort claims,
  • foreclosure of mechanic’s liens, or to
  • actions pursuant to section 573.02 [ACTION FOR DEATH BY WRONGFUL ACT].

Minnesota Probate Claims – Date of Origination

While certain Minnesota Probate Claims relate to pre-death:

liabilities of the decedent whether arising in contract or otherwise,

post-death liabilities of the estate must also be addressed by the Personal Representative of the estate.

Minnesota Probate Claims – Manner of Presentation

 M.S., Section 524.3-803(a) identifies that Minnesota Probate Claims are deemed presented on the first to occur of:

  • receipt of the written statement of claim by the personal representative, or
  • the filing of the claim with the court.

Therefore, Minnesota Probate Claims need not be filed with the court – providing that a written statement of the claim is presented to the Personal Representative of the estate.

Minnesota Probate Claims – Disallowance

  1. Manner of Disallowance of a Minnesota Probate Claim

M.S., Section 524.3-806(a) identifies that the Personal Representative of the estate may disallow any Minnesota Probate Claim which has been properly presented, by providing in part as follows:

As to claims

  •     presented in the manner described in section 524.3-804
  •      within the time limit prescribed or permitted in section 524.3-803,

the personal representative may mail a notice to any claimant stating that the claim has been disallowed.

Therefore, if the Personal Representative of the estate desires to disallow any particular Minnesota Probate Claim which has been properly filed with the court, or presented to the Personal Representative of the estate, the Personal Representative should mail a notice to the claimant stating that the claim has been disallowed.

  1. Effect of Disallowance of a Minnesota Probate Claim

M.S., Section 524.3-806(a) identifies the effect of any timely disallowance of a properly presented Minnesota Probate Claim, by providing in part as follows:

Every claim which is disallowed in whole or in part by the personal representative is barred so far as not allowed unless the claimant

  • files a petition for allowance in the court or
  • commences a proceeding against the personal representative

not later than two months after the mailing of the notice of disallowance or partial allowance if the notice warns the claimant of the impending bar.

Therefore, if the claimant wants to pursue collection of a Minnesota Probate Claim which has been properly disallowed, it must commence a legal collection action against the Personal Representative of the estate not later than two months after the mailing of the notice of disallowance or partial allowance – if the notice had warned the claimant of the impending bar.

  1. Consequences of Failing to Disallow a Minnesota Probate Claim

M.S., Section 524.3-806(a) identifies the consequences of failing to disallow in a timely manner any Minnesota Probate Claim which has been properly filed with the court, or presented to the Personal Representative of the estate, by providing in part as follows:

Failure of the personal representative to mail notice to a claimant of action on the claim for two months after the time for original presentation of the claim has expired has the effect of a notice of allowance, except that

  • upon petition of the personal representative and
  • upon notice to the claimant,

the court at any time before payment of such claim may for cause shown permit the personal representative to disallow such claim.

Therefore, a failure to disallow a Minnesota Probate Claim in a timely manner will result in the claim being allowed by the Personal Representative of the estate, unless prior to its payment, the Personal Representative of the estate obtains a court order permitting the disallowance of the claim.

  1. Court Order to Allow the Payment of a Minnesota Probate Claim

M.S., Section 524.3-806(b) identifies that either the Personal Representative of the estate, or a claimant, may petition the court for an order allowing payment of a Minnesota Probate Claim which has been previously disallowed, by providing in part as follows:

Upon the petition

  • of the personal representative or
  • of a claimant
  • in a proceeding for the purpose,

the court may allow in whole or in part any claim or claims

  • presented to the personal representative or filed with the court administrator in due time and
  • not barred by subsection (a) of this section.

Notice in this proceeding shall be given to

  • the claimant,
  • the personal representative and
  • those other persons interested in the estate as the court may direct by order entered at the time the proceeding is commenced.

Therefore, a petition for a court order allowing the payment of a Minnesota Probate Claim which has been previously disallowed by the Personal Representative of the estate must be filed within two months after the mailing of the notice of disallowance or partial allowance – if the notice had warned the claimant of the impending bar.

Minnesota Probate Claims – Payment

If there is any chance that the estate will be insolvent – with more debts than assets – then all of the estate’s creditors must be treated equally within each class of creditors.

There is a priority ranking scheme for the payment of Minnesota Probate Claims to estate creditors,

  • beginning with legal fees and court costs,
  • followed by funeral expenses.

If the estate’s assets are insufficient to pay all of the Minnesota Probate Claims in full, it’s possible that:

  • some claimants will be entitled to receive nothing from the estate,
  • while other claimants may be entitled to receive all, or a pro rata amount, of their claim.

Minnesota Probate Claims – Insolvent Estates

M.S., Section 524.3-805(a) identifies that Minnesota Probate Claims shall be paid in the following order of priority if estate assets are insufficient to pay all of the claims:

If the applicable assets of the estate are insufficient to pay all claims in full,

the personal representative shall make payment in the following order:

(1)     costs and expenses of administration;

(2)     reasonable funeral expenses;

(3)     debts and taxes with preference under federal law;

(4)     reasonable and necessary medical, hospital, or nursing home expenses of the last illness of the decedent, including compensation of persons attending the decedent, a claim filed under section 256B.15 for recovery of expenditures for alternative care for nonmedical assistance recipients under section 256B.0913, and including a claim filed pursuant to section 256B.15; [MA Claims]

(5)     reasonable and necessary medical, hospital, and nursing home expenses for the care of the decedent during the year immediately preceding death;

(6)     debts with preference under other laws of this state, and state taxes;

(7)     all other claims.

Minnesota Probate Claims – No Preferential Treatment

M.S., Section 524.3-805(a) prohibits preferential treatment in the payment of Minnesota Probate Claims among creditors of the same class, by providing in part as follows:

No preference shall be given in the payment of any claim over any other claim of the same class, and a claim due and payable shall not be entitled to a preference over claims not due, except that if claims for expenses of the last illness involve only claims filed

  • under section 256B.15 for recovery of expenditures for alternative care for nonmedical assistance recipients
  • under section 256B.0913, section 246.53 for costs of state hospital care and
  • claims filed under section 256B.15, [MA Claims]

claims filed to recover expenditures for alternative care for nonmedical assistance recipients under section 256B.0913 shall have preference over claims filed under both sections 246.53 and other claims filed under section 256B.15, and

claims filed under section 246.53 have preference over claims filed under section 256B.15 for recovery of amounts other than those for expenditures for alternative care for nonmedical assistance recipients under section 256B.0913.

The reader may need to review the above provision more than once.

Minnesota Probate Claims – 4 Month Primary Presentation Period

M.S., Section 524.3-803(a) identifies that creditors have a certain time period during which they must either file with the court, or present to the Personal Representative of the estate, any Minnesota Probate Claims, by providing in part that:

all claims against a decedent’s estate which arose before the death of the decedent, . . . if not barred earlier by other statute of limitations, are barred against

  • the estate,
  • the personal representative, and
  • the heirs and devisees of the decedent,

unless presented . . .  within four months after the date of the court administrator’s notice to creditors which is subsequently published pursuant to section 524.3-801;

Minnesota Probate Claims – One Year Extended Presentation Period

In addition to the four month primary claims presentation period, a one-year Minnesota Probate Claims period exists with respect to creditors who were:

  • known and identified by the Personal Representative shortly after the decedent’s death – by reason of evidence readily available to the Personal Representative,
  • but not provided with timely notice of the probate proceeding.

Therefore, with respect to such creditors, the extended Minnesota Probate Claims presentation period will not expire until one year from the date of death, unless a supplementary notice is provided to such creditors.

Minnesota Probate Claims – Supplementary Notices

M.S., Section 524.3-801(b), identifies two separate personal service notice requirements with respect to potential Minnesota Probate Claims:

  • State of Minnesota provided medical benefits; and
  • known and identified general creditors.
  1. Minnesota Probate Claims – State of Minnesota Medical Benefits

The first personal service notice requirement identified in M.S., Section 524.3-801(b) addresses the possible receipt of State of Minnesota provided medical benefits, by providing as follows:

If the decedent or a predeceased spouse of the decedent received assistance for which a claim could be filed under section 246.53, 256B.15, 256D.16, or 261.04, notice to the commissioner of human services must be given under paragraph (d) instead of under this paragraph or paragraph (c).

          (i)      Minnesota Probate Claims – Notice Requirements

One possible creditor in every estate is the decedent’s home county, which has a right to file for reimbursement of:

  • any medical assistance benefits paid on behalf of any person, or
  • any state hospital expenses incurred on behalf of the person.

Even though the decedent may have never received any Minnesota medical assistance benefits from the county of residence, M.S., Section 524.3-801(d)(1) still requires every probate estate to provide a written notice to the Minnesota Commissioner of Human Services regarding the probate proceeding, by providing in part that:

Effective for decedents dying on or after July 1, 1997, if the decedent . . . received assistance for which a claim could be filed under section 246.53, 256B.15, 256D.16, or 261.04, the personal representative or the attorney for the personal representative shall serve the commissioner of human services with notice in the manner prescribed in paragraph (c) as soon as practicable after the appointment of the personal representative.

The Minnesota Commissioner of Human Services will thereafter notify the decedent county’s Department of Human Services with respect to the commencement of the probate proceeding, in order to remind the county to file a Minnesota Probate Claim against the estate for the recovery of any medical assistance or other state benefits paid by the county on behalf of the decedent.

          (ii)     Minnesota Probate Claims – Distribution Restrictions

In order to allow the county sufficient time to research its records before a Personal Representative can make any distribution of assets from the estate, M.S., Section 524.3-801(d)(2) prohibits the Personal Representative from making any distributions of estate assets until 70 days after the notice upon the Minnesota Commissioner of Human Services, by providing as follows:

Notwithstanding a will or other instrument or law to the contrary, except as allowed in this paragraph, no property subject to administration by the estate may be distributed by the estate or the personal representative until 70 days after the date the notice is served on the commissioner as provided in paragraph (c), unless the local agency consents as provided for in clause (6).

This restriction on distribution does not apply to the personal representative’s sale of real or personal property, but does apply to the net proceeds the estate receives from these sales.

Therefore, there is a blanket restriction imposed on the Personal Representative from making any distribution from the estate until 70 days after the required notice to the Minnesota Commissioner of Human Services has been provided – unless a waiver is obtained from the local County Department of Human Services.

  1. Minnesota Probate Claims – Known and Identified Creditors

The second personal service notice requirement identified in M.S., Section 524.3-801(b) with respect to Minnesota Probate Claims is directed to known and identified general creditors, by providing as follows:

The personal representative shall, within three months after the date of the first publication of the notice, serve a copy of the notice upon each then known and identified creditor in the manner provided in paragraph (c).

Once the Personal Representative of the decedent’s estate has been appointed by the Court, the Personal Representative may have to provide a supplementary notice to the estate’s known and identified creditors.

A.  Minnesota Probate Claims – Known Creditors

M.S., Section 524.3-801(b) defines the term known creditors, by providing in part as follows:

A creditor is “known” if:

(i)      the personal representative knows that the creditor has asserted a claim that arose during the decedent’s life against either the decedent or the decedent’s estate;

(ii)      the creditor has asserted a claim that arose during the decedent’s life and the fact is clearly disclosed in accessible financial records known and available to the personal representative; or

(iii)     the claim of the creditor would be revealed by a reasonably diligent search for creditors of the decedent in accessible financial records known and available to the personal representative.

B.   Minnesota Probate Claims – Identified Creditors

M.S., Section 524.3-801(b), defines the term identified creditors, by providing in part as follows:

Under this section, a creditor is “identified” if the personal representative’s knowledge of the name and address of the creditor will permit service of notice to be made under paragraph (c).

C.   Minnesota Probate Claims – Supplementary Notice

M.S., Section 524.3-801(c), imposes an obligation on the Personal Representative to provide a supplementary notice to certain of the known and identified creditors of the estate after the Personal Representative has been appointed by the court, by providing in part as follows:

Unless the claim has already been presented to the personal representative or paid, the personal representative shall serve a copy of the notice required by paragraph (b) upon each creditor of the decedent who is then known to the personal representative and identified either

  • by delivery of a copy of the required notice to the creditor, or
  • by mailing a copy of the notice to the creditor by certified, registered, or ordinary first class mail addressed to the creditor at the creditor’s office or place of residence.

D.   Minnesota Probate Claims – Delivery of Supplementary Notice

M.S., Section 524.3-801(c) appears to identify that the required supplementary notice to creditors can be either:

  • personally delivered, or
  • mailed by certified, registered, or ordinary first-class mail,

to the creditor.

However, the Minnesota Court of Appeals has determined that service by ordinary first-class mail is only effective if the creditor actually receives the supplementary notice – thereby negating the use of ordinary first-class mail for such notice purposes, since:

  • if the creditor denies receiving such notice,
  • it would be ineffective.

See In Re: Estate of Kotowski, 704 NW2d 522, (MN. Ct. App. 2005).

Therefore, any service of the supplementary notice by mail may have to be accomplished by either certified or registered mail in order to provide the court with credible evidence that the notice requirement has been satisfied.

E.   Failure to Provide the Supplementary Notice

If the supplementary notice is not provided to any known and identified creditors of the estate, such creditors will have one year from the date of the decedent’s death in order to either file with the court, or present to the Personal Representative of the estate, a Minnesota Probate Claim against the estate.

This means that if the supplementary notice is not provided to all creditors, the estate may have to be held open for at least one year before it can be closed.

However, if the supplementary notice is provided to all known and identified creditors, the estate can be closed upon the expiration of the primary four month claims period.

Conclusion:

Minnesota Probate Claims

If you need assistance with respect to a particular Minnesota Probate Claim, or multiple Minnesota Probate Claims, contact attorney Gary C. Dahle, at 763-780-8390, or gary@dahlelaw.com.

Related Topics:

For Minnesota Cemetery law issues see http://dahlelawcemeteries.com/

For information on Minnesota Church Corporation law, see also Minnesota Church Law.

For information on Minnesota Transfer on Death Deeds, see also http://www.dahlelawminnesota.com/minnesota-transfer-death-deed/

For information on Minnesota Real Estate Law, see also http://www.dahlelawminnesota.com/minnesota-title-evidence-ownership/

For information on Minnesota Guardianships, see also http://dahlelawguardianships.com/

Gary C. Dahle is also licensed in North Dakota.

For information on North Dakota Probate law, see also http://www.dahlelawnorthdakota.com/

For information on North Dakota Transfer on Death Deeds, see also http://northdakotatransferondeathdeeds.com/

Copyright 2016- All Rights Reserved

Gary C. Dahle – Attorney at Law

2704 Mounds View Blvd., Mounds View, MN 55112

Phone:  763-780-8390    Fax: 763-780-1735

gary@dahlelaw.com

Topics of Interest:

Legal Disclaimer

Information provided herein is only for general informational and educational purposes.  Minnesota Probate claims involve many complex legal issues. If you have a specific legal problem about which you are seeking advice,  consult with a Minnesota attorney of your choice. Gary C. Dahle, Attorney at Law, is licensed to practice law only in the State of Minnesota, in the United States of America. Therefore, only those persons interested in matters governed by the laws of the State of Minnesota should consult with, or provide information to, Gary C. Dahle, Attorney at Law, or take note of information provided herein.

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Nothing herein will be deemed to be the practice of law or the provision of legal advice. Clients are accepted by Gary C. Dahle, Attorney at Law, only after preliminary personal communications with him, and subject to mutual agreement on terms of representation. If you are not a current client of Gary C. Dahle, Attorney at Law, please do not use the e-mail links or forms to communicate confidential information which you wish to be protected by the attorney-client privilege.

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Links to Minnesota Probate Records

Minnesota Department of Health – Death Records Index – 1997 to Present:  http://www.health.state.mn.us/divs/chs/osr/DecdIndex/dthSearch.cfm

Minnesota Historical Society – Death Records; 1904 – 2001: http://www.mnhs.org/people/deathrecords

Minnesota Department of Health – Birth Certificateshttp://www.health.state.mn.us/divs/chs/osr/birth.html

Minnesota Historical Society – Birth Records: http://www.mnhs.org/people/birthrecords

Minnesota Marriage Recordshttps://moms.mn.gov/